Data shows the Bitcoin mining hashrate has been on a decline recently as the difficulty is currently at all-time high levels.
Bitcoin Mining Hashrate Is Down Almost 7% From The Recent High
The “mining hashrate” is an indicator that measures the total amount of computing power currently connected to the Bitcoin network.
When the value of this metric goes up, it means miners are bringing up more rigs online at the moment.
On the other hand, declines in the indicator suggest miners are disconnecting their machines from the network, likely because of a lack of profitability.
Here is a chart that shows the trend in the 7-day average Bitcoin mining hashrate over the last six months:
The value of the metric seems to have gone down in recent days | Source: Blockchain.com
As you can see in the above graph, the Bitcoin mining hashrate hit a high just below the ATH on 13 November, but since then the metric has declined by almost 7%.
A feature on the BTC blockchain is that the block production rate (or simply the rate at which miners handle new transactions) remains almost constant.
However, whenever the hashrate fluctuates, this rate also inevitably changes since miners now hash blocks faster or slower, depending on whether they have more or less computing power after the change.
Since the network doesn’t want this to happen, it changes the value of what’s called the “mining difficulty,” in order to correct the block production rate.
For example, when the hashrate goes up, miners become able to handle transactions faster, and so the blockchain ups the difficulty to slow them down back to the standard rate.
The below chart displays how the Bitcoin mining difficulty has changed recently.
Looks like the metric has observed an increase recently | Source: Blockchain.com
From the graph, it’s apparent that the Bitcoin mining difficulty has reached a new all-time high as the latest adjustment lead to an increase in the indicator’s value.
The reason behind the high difficulty is the near ATH-levels of hashrate that was observed recently. However, as higher difficulty means lesser profits for individual miners involved, some of them would find mining straight up unprofitable after the increase, and hence take their machines offline.
These miners, who had already been under extreme pressure recently due to the bear market, disconnecting their rigs is what’s behind the latest mining hashrate drawdown.
At the time of writing, Bitcoin’s price floats around $16.5k, down 1% in the last week.
BTC has held around $16.5k in the last few days | Source: BTCUSD on TradingView
Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, Blockchain.com